Nicole Foss: Finance and Food Insecurity
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Dorothea Lange Drought-stricken farm family near Muskogee, OK August 1939 It’s taken some time, but Nicole is back. Here’s her first article in a hope
[See the full post at: Nicole Foss: Finance and Food Insecurity]Although they are down today, most of the major grain crops’ spot prices are up substantially in 2014. What is a lot harder to gauge is the price of fruits and vegetables, since these are, individually, much smaller markets.
Last week saw some precipitation on the west coast, including California. But with the rainy season just about over, it is probably a case of ‘too little, too late’. I think that one can make a good case for the idea that fruit and vegetable prices are going to be substantially higher in the USA within a couple of months. Presumably the higher prices would spill over to countries that export those products to the USA as well.
The main reason for dramatic farmland price increases in Britain is because of the huge tax advantages it receives. Inheritance tax is levied at 40% on the wealth above £325,000 of anyone who dies in the UK. This includes the family home, stocks etc. On the basis that ‘only little people pay taxes’ the ultra-wealthy have made sure they have several ways of avoiding this one. First is the exemption from Inheritance Tax (IHT) of any assets handed over more than 7 years before death. This is obviously only useful to the ultra-rich who can feel confident that they can give away £millions while still keeping a few £hundreds thousand to cover their old-age costs. The other loophole is farmland. All agricultural land and associated houses (which can be historic mansions) are completely exempt from Inheritance Tax. That is why a huge proportion of this little island ‘democracy’ is still owned by a tiny number of families who have sat on it for hundreds of years. The small amount of land which does come onto the market each year tends to be bought for tax-avoidance purposes by ageing investors rather than by farmers for food production.
Don’t forget FSU
google land grab ukraine – ignore very recent use of the term for Crimea – see large-scale agriculture. It is different, but the motivation is the same.best
PhilI am one of those ‘industrial farmers’ who help bring the world wheat and soy, though I am not doing so on a ‘massive’ scale. Nicole, I see some conflict inyour arguement, and wish to add something (actually a few things)…
1) starving people bring down governments, so governments that wish to remain in power will do their best not to let people starve
2) credit or no credit markets, the food will flow. just as the Fed printed oodles upon oodles of money to stabilize the system, governments will ensure that the food will continue to flow because…starving people bring down governments.
3) people all levered up into land will suffer, and I don;t know about the rest of the world, but the US farmer learned from the days of “FarmAid” and is no longer levered up beyond the cost of current inputs for current crops in most cases. And if the speculators get hosed and blow out, so be it, they don;t deserve to be farming anyway.
4) there is various ‘quality’ land around the world that is farmed. Some like the brasilian cerrado grows much of nothing without intensive inputs (read petroleum), while other land is productive without such intensive inputs. As energy prices go up, the energy intensive farmer is at a disadvantage to the one that has bought quality land with good transportation networks in place to get grains to market.
5) grains are, unfortunately because they are not all that healthy, one of the cheapest ways to feed people. they are fungible and highly transportable, and make great filler for a plethora of other products found on the shelves in the grocery, or as part of the stable foods of many cultures (eg. tortillas). If you take grains out of the equation, you will see mass starvation. It takes 3-7 grain inputs to ‘grow’ one meat output (depending on the animal). And while veggies are good for you, they do not store well, are highly seasonal, and in an expensive petroleum world, the “2000 mile salad” becomes much more of a non-starter than transport of grains.
6) I think it would be great if everyone put a garden in their back yard, but not everyone even HAS a back yard, let alone the inclination to plant veggies. The increasing size of cities worldwide, and the growth of mega-aglands means the avge person is beholden to the petro-grain complex be it for feedlot meat, or their box of Cheerios, Bisquick, or whatever.
7) food insecurity is real, however few think of “food as fuel”, not only for the use of fuel to produce it, but that the food itself can be used for fuel. In addition to what you write, you should see more strategic investments like the Chinese purchase of SmithField Foods, the largest pork producer in the US. Why should they care to own a pork producer? Simple — they can xport finished pork which already has “absorbed” the cost of energy, water, and food, all of which is in short supply in China. It’s cheaper to pack a ship full of hog carcasses than ship 3-7 similar sized ships full of grain, and you get the energy and water involved to boot!Thus, from my perspective, you will most likely see no large scale collapse in the world food (grain) structure because most years you are only a few weeks away from grain storage silos running dry as you run thru each crop season. And do not forget that South America supplies when North america cannot, etc. Finally, if and when you see yet another ‘bad harvest’ somewhere, as invariably happens, you will see yet another great spike in food stuffs.
Yes, hedge-fund “farmers” paying $10k/ac and up are a little loony to be doing so, assuminga greater fool theory in land price escalation, but land bought at lesser prices can still return 5-10% a year depending on prices in a world where financialized assets return maybe 3-4% if yo are lucky. And history tells you that before the age of FIRE, most wealth was held in “real assets”, not HFT traded digital bits of “paper” ona bookkeeping screen somewhere.
In the end, if my land goes up or down, I care not, as I hope to own it the rest of my life, and for my children to own it as well. No matter what happens to the finance world, I knwo for a fact my family will never go hungry so long as rain falls from the sky. And I’ll take that deal over a share of GOOG any day of the week.
Thanks Nicole for highlighting this nightmarish scenario. I can’t think of anything positive to add…
…only more negatives, I’m afraid. Just as Monsanto and their ilk have created GMOs to destroy the traditional methods of farming and make farmers dependent on big agribusiness, the next outrage is going to be the (deliberate) demise of natural pollinators such as bees. They will be replaced with swarms of drones. Only those who pay (or are in the prerequisite in-group) will be able to grow crops. Every plant pollinated will be recorded and charged for. And they won’t pollinate plants grown with seeds not purchased from big agribusiness.
Welcome to the future…@D,
1) Governments will certainly “do their best”, but it may not be good enough
2) I’m no industrial farmer, but I’m pretty sure having “oodles” of money wouldn’t help my crops grow if there’s no fertilizer/fuel/farm equipment/etc. to buy with it because the financial system has seized up and global trade has come to a standstill. Money without the confidence behind it is basically just excess toilet paper.
3) And if the cost of “current” inputs rises? One might suggest you’re speculating that cost structures won’t change dramatically, and thus ironic that you feel speculators should be blown out…
4) I know where I live in Canada, we’ve unfortunately built a giant “urban sprawl” of houses and concrete over some of our best farmland… I’m sure we’ll realize our mistake soon enough
5) Fair criticisms about vegetables, but perhaps why everyone’s lives are going to have to change once 2000 mile salads as well as grains become no longer affordable for those of us living in large cities or far away from agricultural heartlands
6) There are growing options for us city-folk without backyards (e.g. https://www.freshcityfarms.com/news-events-urban-farming-toronto-local-food-movement/organic-balcony-gardening-101/); while it may be difficult to grow all your produce needs on your balcony, it’s just one part of a bigger solution communities will need to foster in a future that is more about localized solutions
7) I’m not sure how strategic any international purchases really are – once finance and trade start to collapse, good luck to the Chinese owners of a hog company here in getting and product shipped over to mainland China (or getting any of their investment back for that matter); what’s much more likely is that the “strategic” Chinese are looking for ways to funnel their ill-gotten wealth out of China, and buying up a US hog farm may fit that bill
No offense, but your perspective sounds like what you’re hoping will happen as opposed to what likely will be. People who have an investment in something sometimes tend to overlook the risks they face and focus on the things that they think will maintain the status quo.
On the plus side, you seem to be on the right track in thinking about land as a productive asset and one worth passing onto your children and grandchildren. Let’s just hope things don’t get so topsy-turvy in the years to come that holding onto it becomes more difficult than originally thought. And careful about believing to know things to be true as a matter of ‘fact’ – lots of ‘black swans’ out there to ruin all those things we find ourselves so sure of.
Cheers,
VariableThe Georgist perspective is slightly different, and crucially, points to a clear solution.
Speculation in (farm)land is due to the fact that its rental value is untaxed.
Farmland is not used in the best way because farmers are taxed for investing and hiring.
Frank de Jong explains it very well
Regarding the list of numbers –
I think the second half of #5 is actually the weakest. Most of the others I can at least see D’s point. I agree with the first half of #5. Grains are fungible, and easily transported. Root vegetables store fine (see below), but they are mostly water so long distant transport is out of the question on a cost/food calorie basis. Grains are worth shipping around the world.
I guess we could be talking about different vegetables, if you mean “salad greens”, then yes, fair point. But salad greens will never constitute a large share of a person’s daily calories. Many root vegetables store quite well, assuming they’re grown on well mineralized, fertile soil. We eat “out of our garden” through the winter and our roots store in the basement of our old house until May. Once we build a root cellar actually designed with root storage as its purpose we should be able to get to June, which means we’ll have garden veggies year round. Winter squash last a similarly long time. But perhaps by longterm you mean more than one year… grains keep that long thought they’re pretty worthless nutritionally after long storage. But something is better than nothing as you point out.
This is possible on a much larger scale, but perhaps the dietary shift in the consuming public that would be required to push the market in that direction is a bridge too far.
Most people aren’t versed in horticulture and farming, and they aren’t suddenly going to become educated. Which makes me wonder if some enterprising person might be able to design a course of studies on the Internet that qualify a student to become an urban sharecropper. Trainees would set up and monitor urban farms for people living in apartments and subdivisions, but would hopefully have to charge little due to a multitude of customers. For instance:
https://www.youtube.com/results?search_query=pvc+hydroponic+systemAs people struggle to solve food supply problems, I would imagine that a major source of disagreement could arise over the subject of land (and crop) ownership versus stewardship. An awareness of the Tragedy of the Commons might help to reveal the nature of mistakes made in the past, and provide some guidance before this becomes an issue.
I’m new to the comment section of TAE, though I’ve been a steady reader for many years now. Something you all know that I’m going to repeat anyway is, to my way of thinking, foundational to everything said on this website. It’s a quote from Stoneleigh many years ago, and it’s re-appeared in many forms in both hers and Ilargi’s writings. The quote has been posted in large font at the center of my bulletin board ever since I first read it. I consider it to be the holy grail of understanding present economic circumstances, and I’m shocked that the rest of the finance and economics world doesn’t seem to have even discovered it, much less hailed it for its brilliance. Like a good song, I never get tired of it. I hope I’m not the only one who feels this way, and I hope you at least enjoy seeing it again …
“Essentially, there are two kinds of inflation. As inflation is defined as an increase in the supply of money and credit relative to available goods and services, one can achieve inflation either by increasing the money component (as in Weimar Germany or modern Zimbabwe) or the credit component. In the former case, one divides the underlying real wealth pie into smaller and smaller pieces. In the latter case, which represents our situation, one does not subdivide the real wealth pie, but instead creates multiple and mutually exclusive claims to the same pieces of pie.
“A credit expansion thus creates excess claims to underlying real wealth, and we have just lived through the largest credit expansion in human history. In other words, we are all playing a giant game of musical chairs, only there is perhaps one chair for every hundred people playing the game. You can imagine what will happen when the music stops. The free-for-all grab for an available chair represents the extinguishing of excess claims to underlying real wealth, and is deflation by definition. This will represent the end of extend-and-pretend, and the recognition that there is only so much to go around.” -Stoneleigh
Pure genius, and I will forever be in her debt for sharing it.
Hi Variable, let me respond point by point:
@D,
1) Governments will certainly “do their best”, but it may not be good enough
If it came to a total collapse scenario where even governments cannot do their best to
keep it all flowing, pretty much all of us reading and writing here will be dead in no time.
In my case, if my family and I get to our land, we can at least grow cows or other animals.2) I’m no industrial farmer, but I’m pretty sure having “oodles” of money wouldn’t help my crops grow if there’s no fertilizer/fuel/farm equipment/etc. to buy with it because the financial system has seized up and global trade has come to a standstill. Money without the confidence behind it is basically just excess toilet paper.
Yes, there is SOME truth to that. However the lesson comes from the meltdown in Argentina
where farmers bartered their crops for machinery, etc. The ‘king dollar’ may freeze up but
people still gotta eat, and will trade accordingly. Seed and fertilizer dealers will trade for end
products, machinery guys the same. End product will get traded for fuel, or in the case of
corn or soy, turned INTO fuel.3) And if the cost of “current” inputs rises? One might suggest you’re speculating that cost structures won’t change dramatically, and thus ironic that you feel speculators should be blown out…
I have no doubts inputs will rise. In fact, I am sort of ‘betting on it’ by owning quality land that
requires LESS inputs to produce crops. I mentioned the cerrado. Those pp in a full blown
crisis would potentially blow out. And their land would become worthless. However those of
us who have quality land would only find our product in greater demand. Thus we could
‘absorb’ the price increases as needed and pass them along. Again, look at what happens
when we have oNE bad crop nowadays in the world.4) I know where I live in Canada, we’ve unfortunately built a giant “urban sprawl” of houses and concrete over some of our best farmland… I’m sure we’ll realize our mistake soon enough
I am sure you will, as will many others out there. As Joni Mitchell said, “paved paradise and
put up a parking lot…” Again, the question is not so much the land, the question is the
QUALITY of the land. Food is fuel, fuel is food. Quality land will grow ‘fuel’ if need be, junk
land will not.5) Fair criticisms about vegetables, but perhaps why everyone’s lives are going to have to change once 2000 mile salads as well as grains become no longer affordable for those of us living in large cities or far away from agricultural heartlands
My goal is not to ‘defend’ grains, just to point out what cheap calories they bring to the table.
There is a picture out there of some small town in Switzerland where pretty much every
home has a vegetable garden. Can you see North Americans even begin to try as much?
Doubtful. Realistically too stupid and lazy. Like oil, grains are ‘fungible’ nowadays and
the same almost everywhere. Standardization makes them as tradeable as any other item.6) There are growing options for us city-folk without backyards (e.g. https://www.freshcityfarms.com/news-events-urban-farming-toronto-local-food-movement/organic-balcony-gardening-101/); while it may be difficult to grow all your produce needs on your balcony, it’s just one part of a bigger solution communities will need to foster in a future that is more about localized solutions
I tell people to go stand on a freeway overpass some day, and just look down at all the traffic
that passes in an hour alone. How much food do we need for all those people? How much
fuel? Where will the fuel priority be? RoberT Hirsch in his book “The coming world energy
mess” believed that fuel will be allocated to food (almost)first. I agree.7) I’m not sure how strategic any international purchases really are – once finance and trade start to collapse, good luck to the Chinese owners of a hog company here in getting and product shipped over to mainland China (or getting any of their investment back for that matter); what’s much more likely is that the “strategic” Chinese are looking for ways to funnel their ill-gotten wealth out of China, and buying up a US hog farm may fit that bill
No offense, but your perspective sounds like what you’re hoping will happen as opposed to what likely will be. People who have an investment in something sometimes tend to overlook the risks they face and focus on the things that they think will maintain the status quo.
Well, I have never been accused of being an optimist! I got into farming as a strategic edge
not only for the present, but a possible very messy future. One has to remember that in life
it is the FEW (Food, energy, water) that are the most important. So I keep some wood lot
for heat, and this year I will start planting some fruit trees, as well as putting together a
rotating ‘seed bank’ so I have things to plant just in case. Personally I don;t see as dystopian
a future as some of the rest of you. If anything, my greater fear as a grain producer will
always be a large unchecked pandemic or perhaps a world war that encompasses my land.On the plus side, you seem to be on the right track in thinking about land as a productive asset and one worth passing onto your children and grandchildren. Let’s just hope things don’t get so topsy-turvy in the years to come that holding onto it becomes more difficult than originally thought. And careful about believing to know things to be true as a matter of ‘fact’ – lots of ‘black swans’ out there to ruin all those things we find ourselves so sure of.
Oh no doubt! But if not land, what should one own? Gold? Got that. Can’t keep it all in a
shiny metal. Can only store most food for so long. Live in a armored compound and wait?
Not much of a life there. So i’ll do my farming, make my plans, and hope for the best.Cheers,
VariableD,
I’ll have plenty to say about wheat and soy down the line, when I get to writing about nutrition 😉
Starving people do indeed bring down governments, and I fully expect that to happen in more and more places. So far the US government’s way to deal with hunger is to provide minimal food allowances in a humiliating way, but to use the process to further enrich the top of the financial food chain. I can’t think of a much worse way to go about it.
Pretty much nothing flows once the credit markets dry up. It’s amazing just how much of everything we depend on depends in turn on the circulation of money in the economy. People found that out in the Great Depression, when they said they had everything but money.
I know plenty of farmers with debt, particularly those who had been trying to expand to stay ‘ahead of the game’, with more land and new equipment. Quota can be ridiculously expensive too.
Energy dependency is huge. On average modern farming uses 10 units of energy for every one it produces. That’s insane. Without those energy inputs (and the fertilizer etc inputs that energy enables), many people would be finding out that subsoil isn’t very productive. The original topsoil has been strip mined for a long time.
Grains are indeed the cheapest way to feed people, and you’re right that an awful lot of people would starve without them. Their energy dependency means that much grain production will be going away no matter what we do. So will much of any moving food around, not matter what kind of food it is. Moving food around costs money and energy, and we’re going to be short of both. You point out how much grain input is required to produce ‘animal outputs’, but most animals should not be eating grain in any case. Pastured meat is healthy, grain fed meat is not. Pastured can be done in a low energy way.
The Russians fed the population (on cabbage soup mostly) from 10% of their arable land when the big farms failed. There’s a lot that can be done with community gardens. Granted it won’t feed everyone, and certainly not in the way they’re accustomed, but small scale food production could make a big difference.
Agreed that embodied energy and water are important considerations for big food importers who are short of both.
Personally I do see a major collapse in grain production, and I think it’s going to cause chaos.
I hope your children do indeed get to own your land. Of course it’s a vastly better bet than the stock market, or any financial ‘asset’. If there’s no debt on it that may well be possible. Be careful though. Property taxes are going to go through the roof, and a liquidity crunch will make coming up with that money far more challenging than it is now, especially when consumers can’t afford the produce. That’s what happened in the Depression.
@Nicole
I don’t know about other farmers, but this guy is not levered up at all. All cash all the time.
And I am sure you have plenty to say about wheat and soy! I may grow the stuff, but I sure don’t eat it, and tell everyone I know I don’t think they should either. Paleo is the way to go, but we cannot support a planet on paleo-style eating as we continue to add roughly 75 million people a year to world population. Thus grains are the backstop, if you will.
I do have to say that while I respect your work immensely, I am much more in the Jim Rikards camp regarding ‘finance’, where we will see a new worlds reserve currency status and collapse of the current paradigms. But as he says, this has happened before, and it will not mean the end of anything other than change for the dollar and those who hold them. Hence I am better off owning productive farmland and get its annual ‘dividend’ than financial assets.
Frankly, just as we have seen default in currencies throughout history, we will continue to see selective default going forward. Some by inflation, some will hit the dustbin like those before them and before them. Probably we will return to a commodity based currency system with finance caked by metals, foodstuffs, etc. tangible assets. Why do you think Warren Buffet bought a railroad? Cash is trash. Why are nearly all assets going up in cost (in dollar terms)? Cash is trash. The dollar has no real value, but a mine or farmland or an oil well or a railroad has a lot of value. All the funny money being printed IS getting out ‘into the wild’ via tangible asset purchases. The phony inflation numbers are just that.
We can talk about collapse in asset prices but against what? What’s thedollaragainst gold overtime? Which would you rather hold?
I agree leveraged speculators will suffer greatly at some point. Those of us unleveraged will to suffer at all.
I’m glad I “bought the farm”. Inflation. Cannot destroy my land anymore than it can Warrens railroad.
D
Good to hear that not only GS is deluded in doing G-d’s work on this planet, D!
Stupid&Lazy must be kept alive by the the anointed ones, or surely there will be no anointment. LOL.
You guys crack me up!
Thanks for the fun!Oh, by the way, Nicole, a great article!
Seeds are THE problem indeed.@po1
When did I say I am doing G-d’s work? I am just doing MY work. We’re it not for the thievery of the Fed and the USGov there are other things I could and would do. Maybe those days will return…
But I certainly have my reservations….
D, indeed I don’t touch either wheat or soy, ever. I agree we can’t support 7 billion people on a paleodiet (although when people eat satiating proteins and fats they don’t actually need much food because what they eat is so nutrient dense). We can’t support that many on anything other than an industrial system, but we can only do that while we have the energy. Since energy is finite, we’re not going to be able to feed 7 billion at some point no matter what we do. We’re a very long way into overshoot, and catabolizing our natural capital (soil fertility) as we try to stay there. That’s a recipe for carrying capacity collapse.
The impact will be vastly broader than for those who hold dollars. Credit underpins everything today. Even those who are no levered up are going to find all kinds of things they depend on don’t work anymore. What about spare parts for tractors as an example? Or chainsaws? When trade takes the inevitable hit, we’re going to regret not making things like that in our own countries anymore. Selling produce will be very difficult when the customers have no money, so cash flow will collapse.
The dollar isn’t going to collapse any time soon, though it will eventually, like all fiat currencies. Cash is not a long term bet at all, but it is a good short term one, especially US dollars. A good balance is a productive asset with no debt, like your farm, and enough liquidity to see you through for a year, so you can pay the property taxes that will be skyrocketing.
It isn’t inflation we’re facing, it’s deflation. It won’t destroy your farm, but it will make it very difficult to run as a business, and it will be seen as wealth and targeted by the taxman, whether or not you have cash flow. It is going to take a hit in many ways, but it’s still a good option in comparison with the other possibilities. No one is going to be unaffected by a major economic depression though.
One point I’ll be covering in part two is the strip mining of soil fertility through, which industrial agriculture does very effectively. I’ll be writing about GMOs and glyphosate in relation to soil fertility too (and later their health effects). Something to think about if you want subsequent generations of your family to be able to live on the land.
@Nicole,
I am right there with you on the energy issue. However, before the impact of energy gets to the food producers you will see governments around the world cut back energy use to private transport. In fact, look how much driving has “voluntarily” decreased in total miles in the US since the start of “the great recession”. The US in particular is very energy wasteful, and we will find that our wastefulness will be cut off. As I mentioned before, starving people bring down governments, and yo agreed. Pretty much all governments will put in place energy scenarios with rationing, car pools, whatever and ensure that food production is high up on the list. Again, I believe Robert (et al) did a pretty fine job of discussing liquid fuels rationing in “The Impending World Energy Mess” and I encourage you to give it a read. I fully expect that long before I or any other farmers lose access to petro-fuels and derivatives your avge daily LA (or similar) commuter will lose their access. And yes, my input prices will go up significantly, but so will my sale prices because I won’t grow for free.
And yes, I also agree with your credit thesis, but only to a point. Just as we found out far later that the Fed backstopped credit not only on the QT for hundreds of US firms, hedge funds, etc, they also did it for overseas banks, firms, etc. Credit will not totally collapse, it will “reset” and like any reset, there will be winners and losers. Expect the avge Joe to be the loser, as he is always the loser, and the power elite to be the winners as they are always the winners. Again, this is why they are parking their money in fine art, trophy properties, farmland, oil and gas wells, etc. Your avge Joe cannot do such things. He may own his house, and maybe securities which are just paper demands upon a business enterprise that runs on faith in management that oftentimes could care less about anything but making their stock options or bonus payments. Me personally, I would rather own the ‘means of production’ than be on the ends of production. Again, I go back to the FEW. I can live without a new iPad, but I cannot live without the FEW. Your avge Joe condo dweller in Sao Paulo or NYC is hosed. They are dependent upon a tight supply chain. They have no fall back. I have established my fall-back for my family. po1 seems to think that this makes me like GS, but I am only a small time investor/farmer looking at the broader picture. While I don;t want to start chasing cows around again v. growing grains, if I had to that is what I would do. What will that condo dweller do in NYC, eat concrete?
We have been teetering between deflation and inflation for some time. I have told people that we will continue to see “inflation in the things we need. deflation in the things we own”. Food prices continue to rise despite the phony Fed numbers, as do cars (all bought on monthly credit it seems), but try to sell a used boat or similar and prices still have not rebounded. Producers still have a hard time raising prices in a world full of excess labor and limited real growth. You believe that the cenytral banks of the world will fail in their policies to create inflation, but I still have my doubts. They can ALWAYS create inflation if it means saving the banking system. We may see deflation yet again, however the US has only encountered real deflation 2x in maybe the last 100 years. Real deflation would be such a negative for the entire world I would fully expect the Fed, ECB, China, you name it to open the floodgates accordingly. However, none of us really knows what will happen, all we can do is make our best plans accordingly.
Finally, I will agree with you on the entire GMO issue. Frankly, I would celebrate if they were banned tomorrow. Yes my yields would drop, and yes I would make less money every year afterwards, and yes a big part of the Third World would go hungry as a result, but the soils and the planet would be much better off for it., I’m okay with all of that happening. But I doubt it does. Too much money in politics, and too many tentacles form Monsanto et al in the process.
In the end, in the final “Max Max” scenario, if everything goes into the crapper (which will not all happen all at once), I believe I will have done my best to ensure the long term safety and survivability of my family. That is all one can ask for, is it not?
D
I agree with D that farmers will be first in line when fuel runs low. It won’t be a smooth transition, though. Car pooling isn’t going to be easy with most folks living in far flung suburbs.
I got away from gardening for a couple of decades, mainly because I didn’t have a good space for it. When I started back up, it was very frustrating, because it took 3 or 4 years to get that ‘green thumb’ back. The idea that the masses will respond to exponentially higher food prices by growing their own food is an idea that is logical, but there is that pesky learning curve getting in the way.
I tried selling some vegetables from my permaculture project last Summer. It is a hard sell, because people generally believe that food comes from supermarket. They go to the farmers’ market mainly to buy sno cones or donuts or some other specialty item. This year I’m skipping the farmers’ market and selling to a produce market.
Btw, if you want to see a blank stare, just use the word ‘permaculture’ in just about any social or work setting. This is the only realistic global warming workaround that has a remote (or better) chance of working, and not one in a thousand has a clue it even exists, and at this late date. Not good.
Actually pipefit, I see energy allocation in tiers as:
1) politicians and the very well connected (because they are OOOOOHHH so important) he he
2) military and civil police/fire service (so they can keep us all in place or in FEMA camps)
3) farmers and food producers/distributors (to keep the food flowing)
4) strategic transport such as trucking of foodstuffs and railroads for grain movement
5) medical care such as ambulances, healthcare professionals, etc
6) everyone elseD,
I may be useful to note than Nicole and I don’t define inflation as rising prices, but as the money and credit supply multiplied by the velocity of money. Rising (or falling) prices are merely an effect of this. There are tons of articles in our archives that explain this.
This means that you can’t have inflation in one part of an economy and deflation in another, It also means that central bank control over the process is limited, since no-one can force people to spend.
Raul,
There has always been this debate about what the definition of inflation is — be it money expansion or prices rising. Richard Duncan notes that in the present economy money = credit, thus there need not be significant expansion of money but credit to accomplish the same goals. Nichole argues that credit will collapse, and while I by no means discount that arguement or that we could see such a collapse, from my POV if mony=credit as Duncan suggests, then the Fed and other central banks can always create more ‘money’ by backstopping more ‘credit’. We may have already seen that collapse in 2008/2009, and have the template for it’s management at hand.– MORE credit.
Yes, eventually that has to come to a halt, but the can kickers are pretty good at kicking the can. I thought much of what we see now would have happened back in 2001. Perhaps they can keep this party going for another 8-10 years, maybe more, maybe less. It certainly is not going to happen tomorrow. Or the day after.
Getting back to inflation, if money=credit, than the printing of credit equals a monetary expansion. To the man in the streets that equals rising prices. The MotS coud care less about rising or shrinking money supply, he care about the prices he pays for stuff v. the wages he earns. To him there is definitely ‘inflation’ — especially after the Obamanation of ObamaCare.
So yes, I understand your definition. I encourage you to see it also in other ways.
D
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